ECON101 Lecture Notes - Lecture 5: Medical Necessity, Bitcoin

• School: University of Alberta
• Department: Economics
• Course: ECON101
• Professor: Gordon Lee

Document Summary

Topics covered in this lecture: market economy, circular flow diagram, demand. Main characteristics of market economies: self interest. These institutions include: individualist institutions of property and decision making (private property rights, before people can think about making an exchange, they must be clear about what belongs to whom. For decentralized exchange to take place, people must have individually held private property (which is the ownership of assets by non-governmental economic agents: social institutions of trust, trust must exist between buyers and sellers. This trust may be established through cultural norms, through direct one-to-one relationships or through the establishment of contracts: infrastructure for the smooth flow of goods and services, this refers to the physical infrastructure of transportation and storage. Includes private and public elements: money as medium for exchange, to facilitate the flow of goods and services, we need a generally accepted means of payment.